[Good Morning Market] U.S. plunges on AI profitability fears...Korea seen opening lower with volatility ahead

U.S. AI Stock Jitters and CPI Caution Sap Risk Appetite
Volatility Expected in Korean Market on Pre-Lunar New Year Profit-Taking
"Korean Stock Market's Medium-Term Uptrend Will Continue"

On the 13th, the Korean stock market is expected to open lower and then see intraday volatility, weighed down by the sharp decline in U.S. artificial intelligence (AI) stocks and demand for cash ahead of the Lunar New Year holidays.

On the 12th, with the KOSPI opening after breaking an intraday record high, an employee in the dealing room at Hana Bank's headquarters in Seoul is monitoring the stock market and exchange rates. That day, the KOSPI index opened at 5,425.39, up 70.90 points (1.32%) from the previous session. 2026.2.12 Jo Yongjun, Reporter

On the 12th (local time), the U.S. stock market closed sharply lower as renewed concerns over the profitability of AI stocks, triggered by weak guidance from network equipment maker Cisco Systems, overlapped with caution ahead of the release of the January Consumer Price Index (CPI). The Dow Jones Industrial Average fell 1.34% (669.42 points) to 49,451.98, while the S&P 500 closed at 6,832.76 and the Nasdaq Composite at 22,597.15, down 1.57% (108.71 points) and 2.03% (469.32 points), respectively, from the previous session.

Since generative AI company Anthropic released a new model of its work-focused AI tool "Claude" last week, concerns have persisted across the software sector that it could cannibalize the broader market. In addition, worries are mounting that the recent surge in memory prices will increase hardware production costs and erode margins.

Brokerages expect that profitability concerns in the market will need to be resolved sequentially through Nvidia's earnings at the end of February and the results of software companies such as Oracle and Palantir in early March. Until then, they forecast differentiation among AI stocks depending on factors such as the extent of individual share price declines and changes in Wall Street's profitability outlook for specific companies.

The January U.S. CPI to be released tonight is also expected to have a significant impact on the U.S. stock market. This CPI reading is the first inflation indicator to be confirmed since U.S. President Donald Trump nominated Kevin Warsh as the next Federal Reserve (Fed) Chair, and therefore market sensitivity is expected to be higher than at the time of previous CPI releases. The consensus forecasts for headline and core CPI are both 2.5%, suggesting that inflation will remain in the mid-2% range.

However, there is a possibility that several factors will be reflected in the CPI: data normalization after the U.S. government shutdown, seasonal factors such as higher subscription fees and membership prices, and the impact of strength in precious metals. Over the past one to two years, a CPI reading exceeding expectations (consensus) by 0.1 to 0.2 percentage points has not triggered a stock price shock, but if it exceeds expectations by more than 0.2 percentage points, market volatility could increase.

On the 12th, as the KOSPI opened after breaking an intraday record high, a staff member in the dealing room at Hana Bank's Seoul headquarters monitored the stock market and exchange rates. That day, the KOSPI index opened at 5,425.39, up 70.90 points (1.32%) from the previous close. 2026.2.12 Jo Yongjun, Reporter

On this day, the Korean stock market is expected to open lower and then trade with intraday volatility, despite upside factors such as an earnings surprise at Japanese NAND maker Kioxia and a sharp after-hours share price rise at semiconductor equipment company Applied Materials (AMAT) on strong results. The main reasons are the AI shock originating in the United States and demand for cash ahead of the long Lunar New Year market closure.

The previous day, the KOSPI jumped 3.13% to close at 5,522.27. However, considering that the KOSPI's month-to-date gain in February is 6%, which is far less robust than last month's 24% rise, it is interpreted that there is still pressure to moderate the pace of the index's advance.

Even so, the securities industry expects the Korean stock market's medium-term upward trend to remain intact, as Korea's earnings momentum is overwhelmingly stronger than that of developed markets and other emerging markets. As of the previous day, based on MSCI country indices, Korea's year-on-year 12?month forward earnings per share (EPS) growth rate accelerated from 89% in January to 135% in February. This is an overwhelming figure compared with emerging markets over the same period, where EPS growth rose from 22.6% to 30.2%. In the United States it increased from 15% to 15.4%, in Japan it moved from 11% to 9.6%, and in developed markets overall from 14.9% to 15.2%. The fact that foreign investors turned to net buying in the 3 trillion won range the previous day is also seen as reflecting these factors.

Han Jiyeong, a researcher at Kiwoom Securities, said, "Even if volatility events occur in the U.S. stock market during the U.S. CPI release process today or during the domestic market holiday next week, it is appropriate to maintain an increasing allocation to Korean equities as long as the KOSPI's relative earnings momentum advantage and the government's policy momentum continue."